I was on the phone with a client yesterday, and he mentioned that he and his wife had watched a great PBS Frontline documentary called The Retirement Gamble. He told me that “they were saying the same things about fees and low cost index mutual funds that you and Peggy have been telling us”

That afternoon we were meeting with a prospective client, and she mentioned the same program and learned that “two thirds of your investment gains over a long period could be lost to high mutual fund fees”. When you hear about a TV program from two different people in the same day, it’s a hint that the program is worthwhile viewing.

The recommendations are consistent with our approach to investing and helping clients reach their goals:

Work with a Fiduciary, who is legally obligated to put your interests first

Mutual Fund Fees

JOHN BOGLE, CEO, The Vanguard Group, 1974-96: Costs are a crucial part of the equation. It doesn’t take a genius to know that the bigger the profit of the management company, the smaller the profit that investors get. The money managers always want more, and that’s natural enough in most businesses, but it’s not right for this business.

Predicting Market returns

JOHN BOGLE: Good markets turn to bad markets, bad markets turn to good markets. So the system is almost rigged against human psychology that says if something has done well in the past, it will do well in the future. That is not true. And it’s categorically false. And the high likelihood is when you get to somebody at his peak, he’s about to go down to the valley. The last shall be first and the first shall be last.

Fiduciary Advisor

ZVI BODIE, Author, Risk Less and Prosper: A fiduciary is a professional who by law is supposed to put your interests ahead of their own. Broker-dealers are not under that obligation. They have to conform to a suitability standard, which means they can’t put you into something which is totally unsuitable for you.

RON LIEBER, The New York Times: It doesn’t have to be the best thing that you could pick out for them. It’s just something that’s suitable. It’s OK. I can’t believe that somebody would want to get into a business and then stay in the business of merely being suitable.

RON LIEBER: If you’re working with somebody who is trying to sell you financial advice, you say to them, “Are you acting in my best interest here? Would you be willing to sign a pledge that says that you’re going to act as my fiduciary at all times with all products? Because if you’re not, then I’m going to leave.” And it’s really just as simple as that.